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Contributors: Douglas McIntyre Jon C. Ogg

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Saturday, September 23, 2006

Weekend Edition: FCC Auction #66 Final Results; T-Mobile Remained the Largest Buyer of Spectrum

Stock Tickers: DT, VZ, VOD, S, T, BLS, LEAP, CMCSA, TWX, RIMM, NOK

We have noted that the auctioning of FCC spectrum in Auction #66 had been tapering off, and the results are hardly any different as of the last round and end of the auction. The auction says that it has ended on the auction site after 161 rounds. There were no major changes from even round #100 to round #166. T-Mobile ended the auction as the key big spender by finishing first by far, and that was not really expected back at the beginning of summer. It was also not expected that SectrumCo LLC would have been as aggressive, but times change.

T-Mobile did launched the R-I-M Blackberry and the new Nokia phone services shortly after round #100, so it may make sense that they emerged as the winner? There were various reports out of Dow Jones publications claiming that Comcast (CMCSK) was the one to watch, but that consortium is so complex and the offerings are crossing over so much it can make your head spin. This auction was the one that may have set the battleground to make the true digital media convergence come true, and we should see many research reports come out this week now that the results are in. This particular FCC auction will blur the lines that seperated cable companies from phone companies and even wireless plays from cable companies.

You will notice that SpectrumCo did still add on some more ground, but it was not even close to what T-Mobile bought.

These are the key bidding groups with the subsidiaries named:
Cellco (dba Verison Wireless): Verizon (VZ), Vodafone (VOD)
Cingular: AT&T (T), BellSouth (BLS)
Cricket: Leap Wireless (LEAP)
MetroPCS (private, for now)
SpectrumCo LLC: Comcast (CMCSA), Time Warner (TWX), Sprint Nextel (S), Cox Communications, Bright House Networks.
T-Mobile: Deutsche Telekom (DT) unit

Auction No. 66 was for 1,122 licenses:
36 Regional Economic Area Grouping licenses,
352 Economic Area licenses,
734 Cellular Market Area licenses.

HERE is how the auction looked after Round #38:
Qualified Bidders: 168
Rounds Completed: 38
Bidding Days: 11
Results for Round 38
Gross Bids: $12,743,128,200 ($11.8 Billion is from the top 5 bidders)
Dollar Change: $76,153,000
Net Bids:$12,563,802,750
Dollar Change: $55,014,600 (from end of Round 37)
New Bids: 289
Licenses with PWBs*: 978
FCC Held Licenses: 144
Eligible Bidders: 128
*PWBs = Provisionally Winning Bids

Consortium After Round #38
Cellco Partnership $2,798,738,000
Cingular AWS, LLC $1,185,569,000
Cricket Licensee $737,857,000
MetroPCS AWS, LLC $960,146,000
SpectrumCo LLC $2,036,019,000
T-Mobile License LLC $4,100,643,000

Total from these Top Bidders after Round #38: $11,818,972,000

Results After Round #100, with a comparison to Round #38:

You will see below that the pool of eligible bidders has tapered off, and that will continue. The net dollar change from round to round is also becoming negligible.
Bidding Days: 22
Gross Bids: $13,853,958,200
Dollar Change: $1,656,000
% Change: 0.01%
Net Bids: $13,675,457,100
Dollar Change: $297,700
% Change: 0%
New Bids: 19
Withdrawn Bids: 0
Proactive Waivers: 0
Bidders that Reduced Eligibility: 1
Licenses with PWBs*: 1082
FCC Held Licenses: 40
Eligible Bidders: 105
*PWBs = Provisionally Winning Bids

Results After Round #161:
Total PWB Amount $13,879,110,200
Dollar Change: $0
Net Total PWB Amount $13,700,267,150
Reduced Eligibility 1
Licenses with PWBs 1087
FCC Held 35
Stage Transition Percentage 0.00%
Eligible Bidders 104

Consortium Winning Round #38; After Round #100; After Round #161
Cellco Partnership $2,798,738,000; $2,803,353,000; $2,808,599,000
Cingular AWS, LLC $1,185,569,000; $1,333,242,000; $1,334,610,000
Cricket Licensee $737,857,000; $707,238,000; $710,214,000
MetroPCS AWS, LLC $960,146,000; $1,390,788,000; $1,391,410,000
SpectrumCo LLC $2,036,019,000; $2,367,617,000; $2,377,609,000
T-Mobile License LLC $4,100,643,000; $4,178,806,000; $4,182,312,000

Top Bidder Totals:
Round #38: $11,818,972,000.00
Round #100: $12,781,044,000.00
Round #161: $12,804,754,000.00

The attorneys and employees that had to do the bid submissions may be the happiest of all that this auction has ended, but T-Mobile won the most spectrum by far.

Jon C. Ogg

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